BTC Vault
Status: Coming Soon (Phase 3)
The BTC Vault accepts BTC (as cbBTC on Solana) and generates yield through lending and a multi-hop delta-neutral strategy.
Overview
Deposit Asset
cbBTC (Coinbase Wrapped BTC on Solana)
Target APY
3.5–11%
Base Layer
cbBTC Lending (1–3%)
Alpha Layer
cbBTC Collateral → USDC Borrow → SOL DN (3.5–11%)
Rebalancing
Weekly to monthly (includes collateral LTV management)
Decision Metrics
SOL FR + USDC borrow cost + BTC price
Complexity
Highest (multi-hop + collateral management)
How It Works
Base Layer: cbBTC Lending
cbBTC is deposited into lending protocols to earn a base yield.
Always-on — Provides consistent yield
Expected APY: 1–3%
Risk: Smart contract risk, cbBTC wrapper risk
Alpha Layer: Collateralized Delta-Neutral
A multi-step strategy that unlocks SOL funding rate yield from BTC collateral:
Deposit cbBTC as collateral
Borrow USDC against cbBTC (conservative LTV: 50%)
Execute SOL delta-neutral strategy with borrowed USDC
Net yield = SOL FR income − USDC borrow cost
Conditional — Requires both positive SOL FR AND acceptable USDC borrow cost
Expected effective APY: 3.5–11%
Risk: BTC price drop → collateral liquidation, FR reversal, borrow cost spike
Collateral Risk Management
BTC price movements directly affect collateral LTV. A 4-stage deleverage protocol protects against liquidation:
> 55%
Alert + stop new alpha allocation
Warning
> 60%
Partial USDC repayment → restore LTV to 50%
Moderate
> 65%
Aggressive deleverage (>50% of alpha positions repaid)
High
> 70% or BTC 24h change > 15%
Full position close (priority fee auto-increase)
Critical
Liquidation threshold is 90%, providing a ~22% BTC drawdown buffer from the 70% emergency close level.
Why It's the Most Complex Vault
The BTC Vault requires managing two independent decision variables (SOL FR + USDC borrow cost) plus real-time BTC price-driven collateral management. This multi-hop structure introduces more points of failure than USDC or SOL vaults, which is why it is planned as Phase 3 — only after operational excellence is proven with simpler strategies.
Allocation Logic
SOL FR profitable AND borrow cost acceptable
Activate alpha layer
SOL FR drops OR borrow cost rises
Reduce/exit alpha positions
FR < 0 or BTC sharp move
Full retreat to base layer (lending only)
BTC Vault is in the planning phase. Architecture and parameters are subject to change. View Roadmap →
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